Amazon Web Services - The Unabated Cloud Leader

1 November, 2017

Amazon Web Services (AWS), a subsidiary of the Seattle based e-commerce behemoth Amazon Inc., continues to dominate the cloud based market quarter on quarter posting extremely healthy profits and growth. The company continues to beat its competition in the space by a mile.

Some might argue that Microsoft, Google, Alibaba etc. are growing at a much faster rate than AWS is at the moment, but the point that they miss is the base on which growth is being calculated. AWS has a base much larger base when compared to that of Microsoft, Google and Alibaba.

AWS’ dominance in the Infrastructure as a Service (IAAS) market has resulted in a mammoth quarterly revenue postings totalling a sum of 4.57 Billion USD. The number released by the company beats the street's estimate of 4.51 Billion USD in quarterly earnings. This puts Amazon’s cloud computing arm on an $18 billion run rate, as its steady upward growth trajectory continues.

To rebuttal this, some would point out Microsoft's twenty billion USD run in the latest quarterly earnings report. The rebuttal would stand cancelled as Microsoft's major chunk of this twenty billion is not derived from the Microsoft Azure platform, but it's Office 365 services.

The Office 365 platform would be categorised as a Software as a Service (SaaS), whereas its Azure platform is what would get categorised as Infrastructure as a Service (IaaS).

John Dinsdale from Synergy Research, an analyst firm that tracks cloud market share across the different types, states that to properly understand the scope, market share as well as future outlook of these products, one would have to very carefully differentiate between IaaS and SaaS.

A report published by Synergy Research pegs Amazon Web Services’ market share at a class leading thirty five percent. It's competition has quite a lot of catch up to do in the cloud hosting infrastructure market.

The research report that pegs AWS’ market share at thirty five percent is primarily focused on cloud infrastructure services, i.e., IaaS, PaaS and hosted private cloud services. It does not take into account the SaaS market.

A mammoth chunk of Microsoft's cloud revenue postings is from SaaS, making it the kingpin in the SaaS market, conceding the IaaS market to Amazon. Canalys pegs Amazon Web Services’ market share to be thirty one percent, very close to that of Synergy Research leading to a meaningful comparison. Canalys reports that AWS is growing at around 40 percent, Microsoft is growing at 90 percent and Google at around 75 percent.

There’s unquestionably plenty of room left in the market for everyone to grow as the pie expands over the next decade and more workloads get pushed to the cloud. While AWS clearly recognizes the advantage of that head start, CEO Andy Jassy, said in an interview earlier this year that he sees that the competition is coming fast.